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Government Hospitals to the Rescue of Loss-making Pharma Companies

In order to makeup for the loss of the four sick public sector pharmaceutical and chemical companies, the hospitals run by state governments , the railways and the armed forces have been asked to purchase drugs from them to make them profit making units.

According to the ministry of chemicals and fertilizers, Hindustan Antibiotics Limited, Bengal Chemicals and Pharmaceuticals Limited, Hindustan Insecticides Limited and Hindustan Organic Chemicals Limited have been revived.

"India has revitalized four PSUs with an investment of over Rs. 10 billion and asked the hospitals under government, railways and army to purchase drugs from them," said G.S. Sandhu, joint secretary at the ministry of chemicals and fertilizers.

"Government hospitals purchase nearly 500 varieties of drugs and the government has asked them to purchase 102 varieties of drugs including various antibiotic from these PSUs.

"The placement of orders by hospitals will help the PSUs to earn over Rs. 250 crores (Rs. 2.5 billion) annually and make them profit making companies," Sandhu told IANS, adding that the total turnover at the end of this financial year is expected to be Rs. 5 billion.

Authorities said the Bengal Chemicals and Pharmaceuticals Limited would soon be directed to ensure adequate production and supply of anti-rabies vaccine in the market.

Government hospitals in India purchase drugs worth Rs. 30 billion every year and their orders will certainly help the companies very well, said Satwant Reddy, secretary in the ministry.

"Private companies are not producing necessary drugs for poor people. You will not find a folic acid tablet by a private company but its utility for our people is immense. They are cheap but essential and now it's the responsibility of government to manufacture them," she said.

Reddy further said that her ministry would shortly move to cabinet for a revival package for ailing Indian Drugs and Pharmaceuticals Limited (IDPL).

The 46-year-old company set up to make India self sufficient in drug development is currently a loss-making outfit.

It has been incurring losses since its inception except for a brief period of five years from 1974-75 to 1978-79. The accumulated loss and the total liabilities of the company, as on March 31, 2004 were provisionally estimated at over Rs.28.27 billion and Rs. 27.47 billion respectively.


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